By now, the names Moy Park, Oi and Yingli are deeply embedded in your brain, right? And, you know what they are, where they are from and what they do, agreed? Or are you struggling with them: perhaps these names are meaningless to you, or maybe you have seen them somewhere but can’t quite remember where.
The very clued up among you will of course be able to identify Moy Park as a European organic food producer, Oi as a Brazilian telecommunications company and Yingli as a Chinese solar panel manufacturer.
More significantly, for the time being at least, these names are to be seen every day on a rotational sign pitchside at the World Cup in Brazil. If you remembered the names without being prompted, then that’s part of the job done for these corporations. Yet even if you needed reminding to recall them, it is still part of the job done.
Moy Park, Oi and Yingli are all sponsors of this summer’s tournament, and each are seeking to take advantage of the watching eyeballs that the world’s biggest sporting event brings with it. When England played Italy in a first-round game, television viewing figures peaked at 15.6m in Britain alone. More than a billion people watched the final of the last World Cup, in South Africa; almost half the world’s population watched some of the tournament.
That’s an awful lot of eyes, for which each of these companies will have paid FIFA somewhere between $10m and $25m per year. In addition to tournament sponsors, FIFA also has deals with a series of global partners, each of which pays between $25m and $50m per year for their World Cup deals. You will know the names of these corporations, McDonald’s, Coca Cola, Sony and so on.
Aside from making our eyeballs ache, what else do such corporations get from their association with the World Cup? Certainly, there are image benefits; after all, the tournament is A Big Deal in every possible sense. In sponsorship, firms often look for what is known as “image transfer”, and the competition’s glamour, drama and excitement make it an obvious fit for the likes of Hyundai.
As if the optical strain was not enough, sponsors are also engaging in additional “activation” spend. To understand activation in relation to World Cup advertising it is best to think of Visa or adidas as having bought a Ferrari with their initial sponsorship deal. But a fast car is pointless without petrol to make it run. In this case, the petrol is the endless competitions, promotions, and television adverts that have been bombarding us for the past few weeks (with still more to come).
Whether or not you have noticed or have been affected by the endless images of Messi and Ronaldo, or favela kids eating burgers while ramped-up on fizzy drinks would make for an interesting discussion. Yet the major sponsors spend massively on activation, with estimates of total spend ranging from $1 spent on activation for every $1 of contract value, to $2 dollar spent on activation for every $1 of contract value. That’s right, Coke could spend a further $100m trying simply to make their World Cup sponsorship work better for the corporation.
Part of this is corporate hospitality; what better way to entice prospective customers and reward loyal ones than by treating them to a game or two, with champagne and strawberries thrown in for good measure? One estimate highlights the importance of sporting events to the corporate hospitality industry, with around 85% of total expenditure being focused on them. Nice for the beneficiaries, yet nice too for the sponsors who use the World Cup as a foundation for building their businesses.
Not your usual tournament
It all sounds so easy and so straightforward, especially for those corporations that have the money to pay for a World Cup sponsorship deal. But it is not, for so many reasons. To begin with, this is a World Cup like no other, the tournament having already been subject to cynicism, protest, and attack by groups such as Occupy Brazil. Indeed, a recent Coca-Cola sponsored trophy tour event was targeted by protesters.
This is not good for a sponsor’s image, reputation or engagement with customers. Added to this, ongoing corruption issues at FIFA have cast sponsors in such a bad light that some of them have started making public statements questioning football’s governance standards.
There is also the perpetual problem for sponsors of recognition. Just because people see your name at a World Cup, does it mean they remember the association? And even if they do, does it necessarily mean that people will buy the products these corporations produce? Indeed, how many of you intend to rush out after the World Cup Finals are over and buy yourself some Yingli solar panels?
Ignorance among many customers about which companies are actually official World Cup sponsors, allied to the ever-inflating values of FIFA sponsorship deals (which effectively exclude many corporations from the chance of ever sponsoring the cup) has created the conditions for a further threat to sponsorship: ambush marketing.
Some of you may already have been the unwitting victim of an ambush; if you have seen the “Beats by Dr Dre” movie epic, laughed at a Paddy Power advertising campaign, or marvelled at Nike’s Pixar-like football cartoon, then you have been in on an ambush. Such activities are intended to distract customer attention away from and undermine the World Cup deals of official sponsors. In doing this Dre, Paddy and Nike threaten the potential return on investments made by Visa, Hyundai, adidas and the rest of the FIFA pack.
When you therefore watch yet another World Cup game, and your eyeballs start spinning as the rotational signage turns, keep in mind that Moy Park, Oi and Yingli don’t want you to forget them. If you can maintain control of at least one eye though, you should take a look at the stock markets.
If the World Cup really is the commercial opportunity that Emirates Airlines, Johnson & Johnson, Budweiser and the rest would have us believe, then we should be seeing the share price of official sponsors moving on an upward trajectory.
But as the ambushers attack and the protesters rise-up, it may be that the sponsors start to question whether eyeballs alone are enough to justify their investment in this year’s World Cup. The battle is therefore not just on the pitch or the streets of Rio, it is happening pitch-side in Brazil too.